Shares gain on institutional buying

South Korean stocks rose 0.42 percent Thursday as institutional investors shook off market jitters and scooped up local shares, analysts said. The local currency gathered ground against the U.S. dollar.

The benchmark Korea Composite Stock Price Index added 8.26 points to close at 1,988.70. Trading volume was moderate at 686.6 million shares worth 4.65 trillion won ($4.15 billion) with gainers outstripping decliners 419 to 384.

“Institutions led by pension funds seem to have been providing a shield against any further fall for the KOSPI,” said Kim Chul-joong, an analyst at Korea Investment & Securities Co.

Pension funds were net buyers of local equities, snapping up a combined 529.4 billion won on the main bourse since Sept 21.

Institutions bought a net 39.6 billion won on Thursday, while foreigners sold off a net 132.4 billion won.

The KOSPI managed to finish in positive terrain despite lingering market jitters abroad. Spain heightened concern as it chose to not file for the bailout proposed by its European peers.

Its bond yields shot up to more than 6 percent, putting the eurozone nation back on the verge of a default.

“The last chance for Spain would probably be that they accept the rescue deal before the Europe’s financial ministers summit early next month,” added Kim.

Consumer-related shares drove up shares, with local foodmaker Orion gaining 1.41 percent to 934,000 won. Textile maker LG Fashion finished up 1.15 percent to 30,900 won.

Blue chips closed mixed. Tech heavyweight Samsung Electronics climbed 0.98 percent to 1,338,000 won, whereas mobile carrier SK Telecom shed 0.34 percent to 144,500 won.

Shares of companies affiliated with Woongjin Holdings tumbled, as Kukdong Engineering & Construction, a local builder under Woongjin’s wing and the holding company itself, filed for a court receivership on Thursday. Woongjin Coway, a water purifier maker, plunged by the daily limit of 15 percent to 13,650 won.

Woori Finance Holdings, the largest creditor of Woongjin, also slumped 2.67 percent to 10,950 won.

The local currency ended at 1,116.20 won against the greenback, up 4.9 won from Wednesday’s close, as investors made risky bets on the local market, dealers said. (Yonhap News)